The fourth quarter and year of Harju Elekter are marked by record revenues, increasing by almost 15% compared to previous periods. Annual revenue of 175.3 (2021: 152.8) million euros exceeds the Group’s turnover record achieved last year. The growth in sales volumes has been supported by sustained customer relationships based on long-term reliable cooperation. However, by the end of a difficult crisis year, the first loss in company history had to be absorbed. We managed to improve the financial results in the second half of the year, but despite our efforts, we had to make one-time significant reserves and write-offs, which did not allow us to make a profit. Without one-time costs, the operating profit for the last quarter would have been 0.4 (2021 Q4: 0.9) and the second half operating profit would have been 2.5 (2021 II half: 2.0) million euros.
We have laid a solid foundation for 2023 and will continue with the process of creating a cohesively functioning Harju Elekter Group. We have modern factories and equipment in Estonia, Finland, Lithuania, and Sweden. In Västerås a new production building of 6,300 m² was completed at the end of the year, which is the latest addition to our industrial real estate portfolio. With the completion of our modern factory, we decided to consolidate the various units of our Swedish subsidiary in Västerås, to ensure savings and a more cohesive and stronger local unit.
The Group has good liquidity and capitalisation, as well as a strong governance structure. In the last quarter of the year, we established a group management team comprised of experts and began the more centralised management of companies, especially in financial management-control, production-supply chain, and sales-marketing. Harju Elekter’s strategy, which is integrated with sustainability goals, will focus on increasing the sales volumes and profitability of industrial production and projects in the coming years.
Revenue and financial results
Harju Elekter earned revenue of 50.0 (2021 Q4: 43.6) million euros in the reporting quarter and 175.3 (2021: 152.8) million in the reporting year. Compared to the comparable periods, the quarterly and annual revenue growth was 14.7% and 14.8%. The majority of the increase in consolidated revenue in the reporting quarter was due to the increase in sales of low-voltage equipment, substations and electric car chargers.
| EUR ’000 | Q4 | Q4 | +/- | 12M | 12M | +/- | |
| 2022 | 2021 | 2022 | 2021 | ||||
| Revenue | 49,978 | 43,561 | 14.7% | 175,293 | 152,757 | 14.8% | |
| Gross profit | 2,517 | 4,703 | -46.5% | 12,269 | 17,880 | -31.4% | |
| EBITDA | -943 | 1,939 | -148.6% | 217 | 7,220 | -97.0% | |
| Operating profit/loss (-) (EBIT) | -2,063 | 853 | -341.9% | -4,546 | 3,202 | -242.0% | |
| Profit/loss (-) for the period | -2,482 | 894 | -377.6% | -5,567 | 2,610 | -313.3% | |
| Incl. attributable to owners of the parent company | -2,520 | 888 | -383.8% | -5,544 | 2,598 | -313.4% | |
| Earnings per share (EPS) (euros) | -0.14 | 0.05 | -380.0% | -0.31 | 0.15 | -306.7% |
Core business and markets
The production segment accounted for 92.5% of the revenue for the quarter and 89.9% of the revenue for 2022. The revenue of the production segment increased by 22.7% in the reporting quarter and by 18.0% during the year, being 46.2 and 157.6 million euros, respectively.
Sales to the Estonian market was 7.6 (2021 Q4: 6.5) in the reporting quarter and 30.3 (2021: 26.0) million euros in the reporting year, making up 15.2% and 17.3% of the consolidated revenue, respectively (2021 Q4 and 12M: 15.0% and 17.0%). The growth came mainly from the increase in the sales volume of substations and cable distribution cabinets.
In the reporting quarter, revenue from the Finnish market was 18.7% more than the year before, totaling 21.3 million euros. In 2022, with 81.8 (2021: 70.9) million euros earned, the Finnish market grew the most in monetary value compared to the main markets. In the reporting quarter, 42.5% (2021 Q4: 41.1%) and within the reporting year 46.7% (2021: 46.4%) of Harju Elekter products and services were sold to the Group’s largest market.
Sales to the Swedish market decreased by 31.8% compared to the reporting quarters and by 17.3% compared to twelve months, being 7.0 and 22.8 million euros, respectively. The benchmark for the Swedish market was high, as the Swedish subsidiary had more projects underway than usual in the local market in the same period last year. Sweden accounted 14.2% (2021 Q4: 23.8%) of the consolidated revenue of the reporting quarter and 13.0% (2021: 18.1%) of the year 2022 revenue.
The fourth quarter’s revenue from the Norwegian market doubled compared to the previous year, amounting to 8.9 (2021 Q4: 4.2) million euros. The revenue earned in 2022 from the Norwegian market was 21.8 million euros, which is 65.4% more than the previous year. The increase in revenue in both periods is due to the low order volume of the shipping sector in the comparison period. The Norwegian market accounted for 17.8% (2021 Q4: 9.7%) of the consolidated revenue of the reporting quarter and 12.4% (2021: 8.6%) of the annual revenue.
Investments
The value of the Group’s non-current financial investments totalled 23.7 (31.12.21: 25.2) million euros as of the reporting date. Harju Elekter increased its holding in the technology company IGL-Technologies Oy from 5.5% to 10% by 0.2 million euros and sold a 14% holding in SIA Energokomplekss, to focus on its core business.
Share
The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 5.01 euros. As of 31 December 2022, AS Harju Elekter had 10,584 shareholders. The number of shareholders increased during the reporting quarter by 417.
| CONSOLIDATED STATEMENT OF FINANCIAL POSITION | ||
| Unaudited | ||
| EUR ‘000 | 31.12.2022 | 31.12.2021 |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 9,152 | 574 |
| Trade and other receivables | 31,612 | 33,689 |
| Prepayments | 1,126 | 1,844 |
| Inventories | 37,068 | 27,437 |
| Total current assets | 79,958 | 63,544 |
| Non-current assets | ||
| Deferred income tax assets | 1,008 | 690 |
| Non-current financial investments | 23,731 | 25,222 |
| Investment properties | 24,756 | 23,903 |
| Property, plant and equipment | 35,740 | 26,654 |
| Intangible assets | 7,244 | 7,544 |
| Total non-current assets | 92,479 | 84,013 |
| TOTAL ASSETS | 171,437 | 147,557 |
| LIABILITIES AND EQUITY | ||
| Liabilities | ||
| Borrowings | 24,385 | 16,912 |
| Prepayments from customers | 16,827 | 4,659 |
| Trade and other payables | 24,502 | 24,490 |
| Tax liabilities | 3,478 | 3,156 |
| Current provisions | 2,103 | 35 |
| Total current liabilities | 71,295 | 49,252 |
| Borrowings | 20,732 | 11,426 |
| Other non-current liabilities | 0 | 33 |
| Total non-current liabilities | 20,732 | 11,459 |
| TOTAL LIABILITIES | 92,027 | 60,711 |
| Equity | ||
| Share capital | 11,523 | 11,352 |
| Share premium | 2,509 | 1,601 |
| Reserves | 17,768 | 18,716 |
| Retained earnings | 47,771 | 55,315 |
| Total equity attributable to the owners of the parent company | 79,571 | 86,984 |
| Non-controlling interests | -161 | -138 |
| Total equity | 79,410 | 86,846 |
| TOTAL LIABILITIES AND EQUITY | 171,437 | 147,557 |
| CONSOLIDATED STATEMENT OF PROFIT AND LOSS | |||||||
| Unaudited | |||||||
| EUR ‘000 | Q4 | Q4 | 12M | 12M | |||
| 2022 | 2021 | 2022 | 2021 | ||||
| Revenue | 49,978 | 43,561 | 175,293 | 152,757 | |||
| Cost of sales | -47,461 | -38,858 | -163,024 | -134,877 | |||
| Gross profit | 2,517 | 4,703 | 12,269 | 17,880 | |||
| Distribution costs | – 1,449 | – 1,260 | -5,578 | -5,259 | |||
| Administrative expenses | -3,037 | -2,655 | -11,194 | -9,703 | |||
| Other income | 9 | 114 | 351 | 513 | |||
| Other expenses | -103 | -49 | -394 | -229 | |||
| Operating profit/loss (-) | -2,063 | 853 | -4,546 | 3,202 | |||
| Finance income | 48 | 57 | 122 | 129 | |||
| Finance costs | -476 | -101 | -853 | -353 | |||
| Profit/loss (-) before tax | -2,491 | 809 | -5,277 | 2,978 | |||
| Income tax | 9 | 85 | -290 | -368 | |||
| Profit/loss (-) for the period | -2,482 | 894 | -5,567 | 2,610 | |||
| Profit /loss (-) attributable to: | |||||||
| Owners of the parent company | -2,520 | 888 | -5,544 | 2,598 | |||
| Non-controlling interests | 38 | 6 | -23 | 12 | |||
| Earnings per share | |||||||
| Basic earnings per share (euros) | -0.14 | 0.05 | -0.31 | 0.15 | |||
| Diluted earnings per share (euros) | -0.14 | 0.05 | -0.30 | 0.14 | |||
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | ||||||||
| Unaudited | ||||||||
| EUR ‘000 | Q4 | Q4 | 12M | 12M | ||||
| 2022 | 2021 | 2022 | 2021 | |||||
| Profit/loss (-) for the period | -2,482 | 894 | -5,567 | 2,610 | ||||
| Other comprehensive income | ||||||||
| Items that may be reclassified to profit or loss | ||||||||
| Impact of exchange rate changes of a foreign subsidiaries | -47 | -44 | -208 | -57 | ||||
| Items that will not be reclassified to profit or loss | ||||||||
| Gain on sales of financial assets | 0 | 0 | 320 | 265 | ||||
| Net gain/loss (-) on revaluation of financial assets | 20 | 3,900 | -726 | 12,269 | ||||
| Total comprehensive income for the period | -27 | 3,856 | -614 | 12,477 | ||||
| Other comprehensive income | -2,509 | 4,750 | -6,181 | 15,087 | ||||
| Total comprehensive income attributable to: | ||||||||
| Owners of the Company | -2,547 | 4,744 | -6,158 | 15,075 | ||||
| Non-controlling interests | 38 | 6 | -23 | 12 | ||||
Tiit Atso
Chairman of the Board
+372 674 7400
Interim Report of Harju Elekter Q4 2022
